Evolution of Management

SWATI
The Origins of Scientific Management
Henri Fayols general theory of management (six
principles, 1916, 1949).
Technical (production of goods)
Commercial (buying, selling, exchange).
Financial (raising and using capital).
Security (protection of property and people).
Accounting.
Managerial (coordination, control, organization, planning
and command of people).
The Origins of Scientific Management
Fayol (contd.).
Dominant principle was management (contd.).
Centralization.
Scalar chains (supervisors).
Order.
Equity.
Stability of personnel tenure.
Initiative, and.
Esprit de corps.
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Fayols Principles of Management
Division of Labor: allows for job specialization.
Fayol noted jobs can have too much specialization
leading to poor quality and worker dissatisfaction.
Authority and Responsibility
Fayol included both formal and informal authority
resulting from special expertise.
Unity of Command
Employees should have only one boss.
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Fayols Principles of Management
(contd)
Line of Authority
A clear chain of command from top to bottom of
the firm.
Centralization
The degree to which authority rests at the top of
the organization.
Unity of Direction
A single plan of action to guide the organization.
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Fayols Principles of Management
(contd)
Equity
The provision of justice and the fair and impartial
treatment of all employees.
Order
The arrangement of employees where they will be of
the most value to the organization and to provide
career opportunities.
Initiative
The fostering of creativity and innovation by
encouraging employees to act on their own.
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Fayols Principles of Management
(contd)
Discipline
Obedient, applied, respectful employees are
necessary for the organization to function.
Remuneration of Personnel
An equitable uniform payment system that motivates
contributes to organizational success.
Stability of Tenure of Personnel
Long-term employment is important for the
development of skills that improve the organizations
performance.
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Fayols Principles of Management
(contd)
Subordination of Individual Interest to the
Common Interest
The interest of the organization takes precedence
over that of the individual employee.
Esprit de corps
Comradeship, shared enthusiasm foster devotion
to the common cause (organization).
Fayols Principles of Management
(contd)
Fayol regarded the elements of management
as it functions
planning
Organizing
staffing
Leading
Controlling
coordinating
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210
Administrative Management Theory
Administrative Management
The study of how to create an organizational
structure that leads to high efficiency and
effectiveness.
Max Weber
Developed the concept of bureaucracy as a formal
system of organization and administration
designed to ensure efficiency and effectiveness.
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211
Webers Five Principles of Bureaucracy
Authority is the power to hold people
accountable for their actions.
Positions in the firm should be held based on
performance, not social contacts.
Position duties are clearly identified so that
people know what is expected of them.
Lines of authority should be clearly identified
such that workers know who reports to who.
Rules, standard operating procedures (SOPs),
and norms guide the firms operations.
Hawthrone studies
Development of sociological approach to
management
Observing people as products of group behavior
Its called as social man approach
Under took by elton mayo, roethlisberger
Hawthrone plant of the western electric company